SHAH ALAM, 10 Aug: The confidence crisis in the administration of Prime Minister Datuk Seri Mohd Najib Razak has led to a decline in investor confidence, resulting in a worrisome drop in the value of the Ringgit.
Kelana Jaya Member of Parliament, Wong Chen, said that in theory, the depreciation of the Ringgit will cause an increase in national exports, but what has happened is the opposite after almost a year.
“This is not an economic issue or related to the import-export value, but the level of investor confidence in the Malaysian government,” he said when commenting on the impact of the drop in the value of the Ringgit to the national import-export industry.
He explained that the depreciation of the national currency led to an increase in the cost of imported goods, this affecting businesses and consumers.
In addition, the depreciation of the Ringgit is the reason many companies have run out of business if their business centres around imported goods.
“When the Ringgit falls, the cost to buy from abroad increases because imported goods are purchased using currencies such as the US Dollar, depending on the source of the goods.
“If traders increase their price in the local market, they would likely lose customers and the market would become smaller.
“Therefore, they will be desperate to cut their profit margins and this will lead to layoffs,” he told Selangor Kini.
NS
